New reports raise concerns that Greece, once again, may cause financial and economic instability in the European region. Greece and its creditors are currently completing reviews of the country’s proposed bailout, which is predicted to lead to additional 6 billion euros, or about $6.4 million, of bonds due in July.
If the country would fail to meet the budget target, the country will have to come up with plans to cut the federal budget by an amount equivalent to as much as about 2 percent of its GDP.
The Greek creditors will present a proposal to their Finance Minister, Euclid Tsakalotos, who himself will meet with representatives of the European commission in Brussels, trying to break the stalemate Greece has reached with the bailout negotiations.
Teneo Intelligence analysts Wolfango Piccoli and Carsten Nickel wrote in a note to clients on Thursday, “While the Finance Ministry seems to support a quick deal, others are resisting and arguing that Greece could get a better deal if the looming elections yield a major negative surprise that could spook the European leaders and force them to soften their position.” Bloomberg reported.
All the uncertainty regarding the country’s economic policies and future has risen talks of a possible early election. “The risk of early elections is increasing given the rising political cost to the government and its slim majority in parliament,” said Kathrin Muehlbronner, senior vice president at ratings agency Moody’s.